Suarez Farms and Super-Phonic Systems had some difficult decisions about what to make, who to make it for, and how to make it. E
ach business first had to think about the kind ofor service it wanted to provide before considering if it was the best fit for. Finally, the companies had to take theirwants and needs into consideration. In making their decisions, both companies had to remember the factors of production: land or natural resources,, and capital.
The factors of production are resources someone uses when producing goods or services in order to make an economic profit. These are:
Land. It includes<em> all natural resources available to create a supply</em>. This means that "land" involves anything that comes from the land: water, oil, copper, coal, forests, and natural gas. Some resources are renewable, such as forests, or nonrenewable, like natural gas and oil.
Labor. Work done by people's effort. In order to measure the value of the workforce, education, skills, and motivation are taken into consideration. <em>Their work is rewarded with wages</em>.
Capital. Capital goods are man-made objects used in production, like machinery, buildings, chemicals, and tools. <em>We call interest to the income earned by owners of capital.</em>
Entrepreneurship. We call this to the person who combines the other factors of production-land, labor, and capital- to <em>earn a profit.</em> They take an idea and develop it into a business.
